May 9, 1995
John Hancock Properties Limited
Partnership
C/O John Hancock Realty
Equities, Inc.
200 Berkeley St.
Boston, MA 02117
Attention: Scott E. Morrow, Assistant Vice President
Northgreen Partners
388 Pearl Street
P.O. Box 529
Eugene, OR 97440-2050
Attention: E. Danell Giustina, Managing Partner
Re: John Hancock Properties Limited Partnership, a Massachusetts
limited partnership (the "Borrower")
Northgreen Partners, an Oregon general partnership (the "New
Borrower")
Great-West Life & Annuity Insurance Company, a Colorado
corporation (the "Lender")
Northgreen Apartments
1800 Cal Young Road
Eugene, OR (the "Property")
Loan No. OR 70235 (the "Loan")
Assumption of Loan
Gentlemen:
This letter agreement amends and supersedes in its entirety that
certain letter from the Lender dated April 11, 1995.
In response to your most recent request and provided that the terms,
conditions and other requirements set forth herein are fully complied
with, the Lender hereby consents to the transfer of the Property to,
and the assumption of the Loan by the New Borrower, as is more
particularly described hereinbelow. The specific terms, conditions and
other requirements to the Lender's consent are as follows:
Loan No. OR 70235
May 9, 1995
Page 2
1. Loan Documents. The documents which evidence, secure and
otherwise relate to the Loan include, without limitation, the
following: (a) that certain Note Secured by Deed of Trust dated
September 12, 1988 executed by the Borrower payable to the Lender's
predecessor in interest, The Great-West Life Assurance Company, a
Canadian corporation ("Assurance"), in the original principal amount
of $5,000,000.00 (the "Note"); (b) that certain Trust Deed granted by
the Borrower for the benefit of Assurance dated September 12, 1988 and
recorded September 15, 1988 in the Lane County, Oregon records as
Reception No. 8838512 (the "Deed of Trust"); (c) that certain
Absolute Assignment of Leases from the Borrower to Assurance dated
September 12, 1988 and recorded September 15, 1988 in the Lane County
records as Reception No. 8838513 (the "Lease Assignment"); and (d)
that certain Environmental Warranty and Indemnification Agreement from
the Borrower to Assurance dated September 12, 1988 (the "Environmental
Agreement"). The foregoing documents and all other documents and
agreements evidencing, securing or otherwise relating to the Loan, as
any of them may be modified, shall hereinafter be collectively
referred to as the "Loan Documents."
The Deed of Trust was assigned by Assurance to the Lender pursuant to
that certain Assignment of Trust Deed by Beneficiary dated December
19, 1989 and recorded December 26, 1989 in the Lane County, Oregon
records as Reception No. 8958220. The Lease Assignment and the
Environmental Agreement were assigned by Assurance to the Lender
pursuant to that certain Assignment of Miscellaneous Documents dated
November 19, 1989 and recorded December 26, 1989 in the Lane County,
Oregon records as Reception No. 8958227.
2. No Defaults. No defaults shall have occurred which are then
continuing under the Loan as of the date of transfer of the Property
to the New Borrower.
3. Acknowledgment of Current Loan Balance. The Borrower hereby
acknowledges that the current outstanding balance of the Loan as of
April 17, 1995, when the May payment was received and applied, is
$4,603,711.10.
4. Transfer of Property; Assumption Fee. It is the Lender's
understanding that the Property shall be conveyed to and the Loan
shall be assumed by the New Borrower pursuant to the terms and
conditions of that certain fully executed Purchase and Sale Agreement
dated March 13, 1995 (the "Purchase Agreement"), a copy of which has
been provided to the Lender. The Purchase Agreement provides, among
other things, for a purchase price of $9,200,000.00 (comprised of
assumption of the Loan with the balance to be paid at Closing),
payment by the Borrower of the costs of assuming the Loan and a
closing date of May 30, 1995 (the "Closing").
Notwithstanding anything to the contrary set forth at paragraph 9 of
the Deed of Trust, the Lender hereby consents to the foregoing
described transfer of the Property to and assumption of the Loan by
the New Borrower subject to such transaction being concluded
substantially in accordance with the Purchase Agreement and payment to
the Lender of a non-refundable assumption fee in the amount of
$46,000.00 (the "Assumption Fee"), which shall be remitted at Closing,
and subject further to the New Borrower's execution of an assumption
agreement prepared by the Lender's local counsel as described
hereinbelow, and to the Lender's receipt and approval of the following
documents:
Loan No. OR 70235
May 9, 1995
Page 3
(i) written evidence of the authority of the Borrower to
transfer the Property to the New Borrower, and the authority of the
officer signing on behalf of the Borrower's corporate general partner
to execute and deliver the documents necessary to effect such
transfer;
(ii) written evidence of the authority of the New Borrower to
purchase the Property and assume the Loan and designating which of its
partners shall have the authority to execute any and all documents in
connection therewith, and the authority of the general partner (if
less than all) signing on behalf of the New Borrower to execute and
deliver the documents necessary to effect the purchase of the Property
and assumption of the Loan;
(iii) certified copies of the New Borrower's Partnership Agreement
and any amendments thereto;
(iv) a fictitious or trade name affidavit, as applicable, for the
New Borrower;
(v) copies of any and all other documents regarding the Property
and/or the New Borrower, which are furnished or prepared in connection
with the due diligence with respect to the sale of the Property to and
assumption of the Loan by the New Borrower, including, without
limitation environmental assessment reports, surveys, engineers
reports, title commitments, etc.; and
(vi) a copy of the fully executed recorded Warranty Deed, Bill of
Sale, and Settlement Statements for the Borrower, as seller, and the
New Borrower, as purchaser, evidencing, among other things, the
purchase price of $9,200,000.00, as adjusted by prorations provided in
the Purchase Agreement.
5. Assumption Agreement. Promptly after receipt of this fully
executed letter agreement an assumption agreement shall be prepared in
recordable form by the Lender's local counsel, Stoel, Rives, Boley,
Jones & Gray, whereby the New Borrower shall assume all payment and
performance obligations of the Borrower under the Loan Documents
without releasing the Borrower from liability thereunder for any
matters arising prior to Closing, subject, however, to the limited
recourse provisions of the Loan Documents (the "Assumption
Agreement"). The Assumption Agreement shall be executed on or before
the Closing and thereafter promptly recorded in the real estate
records of Lane County, Oregon.
6. Limitation on Lender's Consent. The foregoing consent on the
part of the Lender to the transfer of the Property to and assumption
of the Loan by the New Borrower is expressly limited to the particular
transaction described hereinabove and shall not be deemed, nor shall
it operate as a consent to any future or successive transfers or
assumptions.
7. Title Insurance; Endorsement. The Lender shall be furnished with
a copy of the title commitment and the owner's policy of title
insurance which are provided to the New Borrower with respect to the
Property. If the Lender's local counsel deems it necessary, the Loan
Policy of Title Insurance issued by Ticor Title Insurance Company of
California on September 15, 1988, Policy No. L033073, shall be
endorsed at the sole expense of the Borrower to reflect the vesting of
fee title in the New Borrower and the recordation of the Assumption
Agreement.
Loan No. OR 70235
May 9, 1995
Page 4
8. Modifications in Writing. This letter agreement maybe modified
or amended only in writing signed by the parties hereto. No oral
modification or amendment to this letter agreement shall be effective.
9. Costs, Fees and Expenses. All costs, fees and expenses incurred
in connection with the transactions described herein, including,
without limitation, the fees and expenses of the Lender's local
counsel, title costs, and recording and filing fees, shall be paid
immediately when and as due by the Borrower and the New Borrower in
accordance with their agreement set forth at paragraph 9 of the
Purchase Agreement. Any failure to pay the foregoing costs, fees and
expenses when due shall constitute an event of default under the Loan,
whereupon the Lender shall be entitled to exercise all remedies
available to it at law, in equity and under the Loan Documents, as
they may be modified, including, without limitation, the right of the
Lender to add the amount of such defaulted costs, fees or expenses to
the indebtedness evidenced by the Note.
10. No Consents. The Borrower and the New Borrower hereby represent
to the Lender that no consent of any person or entity not a party
hereto is required, and they hereby agree to and do indemnify, defend
and hold harmless the Lender from and against any and all loss, damage
or liability whatsoever, including, without limitation, attorneys'
fees and costs, arising from any failure to obtain the consent of any
such person or entity which is not a party hereto.
11. Binding Effect. This letter agreement shall be binding upon the
parties hereto and shall inure to the benefit of the parties hereto
and the successors and assigns of the Lender.
12. No Release of Makers or Collateral. It is hereby expressly
agreed that execution of this letter agreement shall not effect a
release of any makers, guarantors or any other party to the Loan
Documents or any other undertakings in connection therewith, nor shall
this letter agreement effect a release of any collateral given at any
time to secure payment of the Loan.
13. Ratification. It is hereby expressly agreed that the Loan
Documents shall be and remain in full force and effect and are hereby
ratified and affirmed in their entirety, including, without
limitation, the Borrower's limited recourse liability for payment and
performance obligations under the Loan.
14. No Waiver of Lender's Rights. It is hereby acknowledged and
agreed that nothing contained herein shall be deemed or shall operate
to waive or affect in any way whatsoever the rights of the Lender to
enforce the Loan Documents and the Lender expressly reserves all
rights it may have to pursue any and all available remedies existing
at law, in equity or under the Loan Documents, subject, however, to
the limited recourse provisions of the Loan Documents. No course of
dealing or conduct shall be effective per se to amend, waive, release
or change the provisions in the Loan Documents.
Loan No. OR 70235
May 9, 1995
Page 5
15. Counterparts. This letter agreement may be executed in one or
more counterparts, which, when taken together, shall constitute one
original agreement.
Please indicate your acceptance of the foregoing terms, conditions and
other requirements by signing in the space provided below on the
duplicate originals of this letter agreement enclosed herewith and
returning them to the attention of the undersigned on or before May
16, 1995. This letter agreement shall become a binding agreement upon
the Lender's receipt of the fully executed letter agreement.
Very truly yours,
LENDER:
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY,
a Colorado corporation
By: RANDIE TAYNER
------------------------
Randie Tayner
Assistant Vice President
Mortgage Investments
By: R.H. OLESON
------------------------
R.H. Oleson
Vice President
Mortgage Investments
Loan No. OR 70235
May 9, 1995
Page 6
Agreed to and accepted by the Borrower this 11th day of May, 1995.
The undersigned Borrower hereby represents and warrants that its
execution of this letter agreement and the performance of its
obligations hereunder have been duly authorized by the requisite
partnership and corporate acts and that performance of its obligations
hereunder shall not violate applicable provisions of any law, its
Limited Partnership Agreement or the Articles of Incorporation and
Bylaws of its corporate general partner, John Hancock Realty Equities,
Inc.
BORROWER:
JOHN HANCOCK PROPERTIES LIMITED PARTNERSHIP,
a Massachusetts limited partnership
(Seal)
By: John Hancock Realty Equities, Inc.,
a Delaware corporation, Attest:
its General Partner
By: SCOTT E. MORROW SANDRA L. SILBERT
------------------------ ------------------------
Scott E. Morrow Name: Sandra L. Silbert
Assistant Vice President Title: Secretary
Being the Sole General Partner of the Borrower
The undersigned New Borrower hereby represents and warrants that its
execution of this letter agreement and the performance of its
obligations hereunder have been duly authorized by the requisite
partnership acts and that performance of its obligations hereunder
shall not violate applicable provisions of any law or its Partnership
Agreement.
NEW BORROWER:
NORTHGREEN PARTNERS,
an Oregon general partnership
By: E. DANELL GIUSTINA MAY 12, 1995
----------------------- --------------------
E. Danell Giustina Date of Acceptance
Managing General Partner
Loan No. OR 70235
May 9, 1995
Page 7
pc: J. Cahan, Assistant Counsel, Investments-Legal, 2T2
D. Vande Vrede, Associate Manager, Mortgage & Real Estate
Administration, 2T2
J. Ryan, Assistant Manager, Mortgage Administration, 2T2
V. Kenney, Legal Assistant, Investments-Legal, 2T2
S. Martens, Associate Manager, Mortgage Closing, 3T2
Thomas R. Nicolai, Esq., Stoel, Rives, Boley, Jones and Gray (via
facsimile (503) 220-2480)
Rohn M. Roberts, Esq., Arnold Gallagher Saydack Percell and
Roberts, P.C. (via facsimile (503) 484-0536)
Nathaniel I. Margolis, Esq., Assistant Counsel, John Hancock
Realty Equities, Inc.